The National Commission for Micro and Small Enterprises (Conamype) stated on Friday that the expected economic momentum will help counterbalance the impact of a proposed minimum wage increase on entrepreneurs in El Salvador.
Paul Steiner, president of Conamype, acknowledged that micro and small businesses face higher production costs, but described the 12% wage hike proposed by President Nayib Bukele as “very sensible.” He added that “this will turn into economic momentum. The same company that pays 10% more in wages will likely see an increase in sales, probably much more than 10%.”
According to Steiner, the additional income for minimum wage earners will not be saved but rather spent on basic goods, housing, and school supplies — injecting money directly into the economy.
President Bukele submitted the wage increase proposal to the National Minimum Wage Council (CNSM) on April 25, 2025, after nearly four years without a salary revision. The announcement triggered mixed reactions among business leaders, economists, and civil society. While some argue the raise won’t sufficiently match the rising cost of living, business associations have expressed conditional support, urging policies to assist small-scale producers.
When asked on YSKL radio about subsidies for small businesses, Steiner recalled the 2021 wage hike of 20% as “very strong” for entrepreneurs, prompting the government to offer financial aid. “But now we’re talking about just over 10%. The president is not saying to double the wages. It’s important to apply a reasonable perspective. It’s not just about supply, it’s also about demand,” he noted.
Steiner also pointed out that only one in three Salvadorans work in the formal sector, and of those, just one in five will benefit from the proposed wage increase. He emphasized that the ultimate goal is to expand formal employment so more citizens can benefit from future wage adjustments.